'India can manage a progressive transition from coal to renewables'
In the coal vs renewables question in India, a more flexible power system can help manage a progressive transition, according to TERI's new discussion paper 'Coal Transition in India'
India's energy supply is heavily reliant on fossil-based sources, notably coal. Traditionally, coal has been the most abundant and cost-effective resource. However, a number of factors are now driving increased uncertainty around the role of coal in the future energy mix. This paper discusses the possibilities of energy transition in India with particular reference to the implications for the coal sector.
Renewables are now the cheapest source of new power generation, and are cheaper than the variable costs of a substantial portion of the existing coal-fired power generation fleet. The transition in the power sector will thus be determined by the scale and speed with which the flexibility of the power system can be increased to accommodate for the variable generation of wind and solar. This is a substantial challenge, and will require large-scale changes in technology, system operation, and electricity markets and regulation. At the same time, accommodating the variable generation of wind and solar has additional costs, which need to be factored in.
Our analysis suggests that these costs, even conservatively estimated, do not change the picture that renewables are a highly competitive source of electricity generation in India. The labour market transition in coal mining states and regions should be given due consideration, but given labour productivity improvements in coal mining, we cannot expect the coal sector to solve the employment problem, even in coal-intensive states and regions. Rather than sector-specific policies to cushion the coal sector transition, macroeconomic job creation policies are required.